Brian Thomas, 59, of Neath, South Wales, killed his wife Christine, 57, while they were holidaying in West Wales in July 2008.
At Swansea Crown Court today the prosecution told the jury that it was no longer seeking a special verdict of not guilty by reason of insanity and that there would be no purpose in sending Thomas to a psychiatric hospital.
The court erupted into shouts of "yes" as family members jubilantly greeted the outcome today.
Their reaction came after Paul Thomas QC, the prosecutor, explained the situation to the jury after yesterday's day-long adjournment in proceedings.
"We are no longer seeking a special verdict of not guilty by reason of insanity," Mr Thomas told the jury.
"We have a continuing duty to review the case and we took the opportunity yesterday to take stock of the situation.
"It is clear from the evidence that no useful purpose would be served by Mr Thomas being detained in a psychiatric hospital."
Iwan Jenkins, Chief Crown Prosecutor for CPS Dyfed Powys, said: "This has been a unique case with a unique set of circumstances.
"We have a duty to keep cases under continuous review, and following expert evidence from a psychiatrist it was suggested no useful purpose would be served by Mr Thomas being detained and treated in a psychiatric hospital, which would be the consequence of a special verdict in this case.
"Once it was raised, the CPS had a duty to review the case and decided that, guided as we must be and have been throughout this case by the views of the experts, the public interest would no longer be served by continuing to seek a special verdict of not guilty by reason of insanity.
"The consequences of such a finding would have meant Mr Thomas' detention in a psychiatric hospital, but it is now clear that the psychiatrists feel that that would serve no useful purpose and the risk of reoccurrence is very, very small. We therefore have offered no further evidence and asked the jury to return a simple verdict of not guilty."
He added: "Our thoughts remain with the family of Brian and Christine Thomas who have remained dignified throughout this difficult time."
High Court Judge Justice Davis KT, told Thomas that in the eyes of the law he bore no responsibility for what he had done.
He described him as a "decent man and devoted husband".
He said that from his understanding of his character from what had come out in court he may go away with a sense of guilt about what happened but he underlined a second time: "In the eyes of the law you bear no responsibility for what happened."
Raymond Thomas, the brother of Brian, spoke of his relief and jubilation at the outcome today as he left court.
"Family and friends are truly delighted by the outcome today.
"They were a loving couple and always like that together.
"He has always been a loving husband and a family man.
"This was a tragic, tragic episode and we are all very emotional."
He added: "It is like one psychiatrist has said, this was a perfect storm. My brother is a decent man."
During the brief trial at Swansea Crown Court, there was intensive interest in details of the case across the world.
It opened on Tuesday with jurors hearing that Mr Thomas accepted that he had killed his wife of 40 years, who had also been his childhood sweetheart.
They were told that psychiatrists for the prosecution and the defence agreed that he suffered from a long-standing sleep disorder and he had been in a state of automatism at the time.
That meant that while he was asleep his mind was not in control of what his body was doing.
The tragic death of his wife happened in July last year when the couple had travelled 60 miles to Aberporth in West Wales in their Peugeot camper van.
They stopped for the night in a car park but were disturbed by boy racers doing wheel spins and handbrake turns.
As a result they moved to a pub car park for the rest of the night.
But Mr Thomas, who took medication for depression, had stopped taking his tablets some time before the holiday.
The couple, who had separate bedrooms at their home in Neath, planned to be "intimate" while on holiday.
Mr Thomas had stopped his medication because one of the side-effects was that it made him impotent.
Expert evidence during the trial, however, suggested that he would have suffered worsening dreams and nightmares as a result of the withdrawal symptoms he would be experiencing.
In a nightmare probably triggered by the earlier incident with the boy racers, Mr Thomas believed an intruder had broken into the couple's camper van.
During the violent nightmare he attacked and fought the intruder and got him in a headlock - only to wake and find he had strangled his wife.
Due to the highly unusual nature of the case the prosecution had been seeking a "special verdict" of not guilty of murder by reason of insanity.
The alternative to that was a simple not guilty verdict.
Expert evidence from both sides previously made it clear that there was no purpose in sending Mr Thomas to a psychiatric hospital.
Therefore, today the jury was instructed by Justice Davis to bring in a formal not guilty verdict and Mr Thomas was freed after being held in custody since January.
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